FOMC STATEMENTS: SIDE-BY-SIDE
November 3 Text
Information received since the Federal
Open Market Committee met in September
confirms that the pace of recovery in output
and employment continues to be slow. Household
spending is increasing gradually, but remains
constrained by high unemployment, modest
income growth, lower housing wealth, and tight
credit. Business spending on equipment and
software is rising, though less rapidly than
earlier in the year, while investment in
nonresidential structures continues to be
weak. Employers remain reluctant to add to
payrolls. Housing starts continue to be
depressed. Longer-term inflation expectations
have remained stable, but measures of
underlying inflation have trended lower in
recent quarters.
Consistent with its statutory mandate,
the Committee seeks to foster maximum
employment and price stability. Currently, the
unemployment rate is elevated, and measures of
underlying inflation are somewhat low,
relative to levels that the Committee judges
to be consistent, over the longer run, with
its dual mandate. Although the Committee
anticipates a gradual return to higher levels
of resource utilization in a context of price
stability, progress toward its objectives has
been disappointingly slow.
To promote a stronger pace of economic
recovery and to help ensure that inflation,
over time, is at levels consistent with its
mandate, the Committee decided today to expand
its holdings of securities. The Committee will
maintain its existing policy of reinvesting
principal payments from its securities
holdings. In addition, the Committee intends
to purchase a further $600 billion of longer-
term Treasury securities by the end of the
second quarter of 2011, a pace of about $75
billion per month. The Committee will
regularly review the pace of its securities
purchases and the overall size of the asset-
purchase program in light of incoming
information and will adjust the program as
needed to best foster maximum employment and
price stability.
The Committee will maintain the target
range for the federal funds rate at 0 to 1/4
percent and continues to anticipate that
economic conditions, including low rates of
resource utilization, subdued inflation
trends, and stable inflation expectations, are
likely to warrant exceptionally low levels for
the federal funds rate for an extended period.
The Committee will continue to monitor
the economic outlook and financial
developments and will employ its policy tools
as necessary to support the economic recovery
and to help ensure that inflation, over time,
is at levels consistent with its mandate.
Voting for the FOMC monetary policy
action were: Ben S. Bernanke, Chairman;
William C. Dudley, Vice Chairman; James
Bullard; Elizabeth A. Duke; Sandra Pianalto;
Sarah Bloom Raskin; Eric S. Rosengren; Daniel
K. Tarullo; Kevin M. Warsh; and Janet L.
Yellen.
Voting against the policy was Thomas M.
Hoenig. Mr. Hoenig believed the risks of
additional securities purchases outweighed the
benefits. Mr. Hoenig also was concerned that
this continued high level of monetary
accommodation increased the risks of future
financial imbalances and, over time, would
cause an increase in long-term inflation
expectations that could destabilize the
economy.
September 21 Text
Information received since the Federal
Open Market Committee met in August indicates
that the pace of recovery in output and
employment has slowed in recent months.
Household spending is increasing gradually,
but remains constrained by high unemployment,
modest income growth, lower housing wealth,
and tight credit. Business spending on
equipment and software is rising, though less
rapidly than earlier in the year, while
investment in nonresidential structures
continues to be weak. Employers remain
reluctant to add to payrolls. Housing starts
are at a depressed level. Bank lending has
continued to contract, but at a reduced rate
in recent months. The Committee anticipates a
gradual return to higher levels of resource
utilization in a context of price stability,
although the pace of economic recovery is
likely to be modest in the near term.
Measures of underlying inflation are
currently at levels somewhat below those the
Committee judges most consistent, over the
longer run, with its mandate to promote
maximum employment and price stability. With
substantial resource slack continuing to
restrain cost pressures and longer-term
inflation expectations stable, inflation is
likely to remain subdued for some time before
rising to levels the Committee considers
consistent with its mandate.
The Committee will maintain the target
range for the federal funds rate at 0 to 1/4
percent and continues to anticipate that
economic conditions, including low rates of
resource utilization, subdued inflation
trends, and stable inflation expectations, are
likely to warrant exceptionally low levels for
the federal funds rate for an extended period.
The Committee also will maintain its existing
policy of reinvesting principal payments from
its securities holdings.
The Committee will continue to monitor
the economic outlook and financial
developments and is prepared to provide
additional accommodation if needed to support
the economic recovery and to return inflation,
over time, to levels consistent with its
mandate.
Voting for the FOMC monetary policy
action were: Ben S. Bernanke, Chairman;
William C. Dudley, Vice Chairman; James
Bullard; Elizabeth A. Duke; Sandra Pianalto;
Eric S. Rosengren; Daniel K. Tarullo; and
Kevin M. Warsh.
Voting against the policy was Thomas M.
Hoenig, who judged that the economy continues
to recover at a moderate pace. Accordingly, he
believed that continuing to express the
expectation of exceptionally low levels of the
federal funds rate for an extended period was
no longer warranted and will lead to future
imbalances that undermine stable long-run
growth. In addition, given economic and
financial conditions, Mr. Hoenig did not
believe that continuing to reinvest principal
payments from its securities holdings was
required to support the Committee's policy
objectives.